Peripheral Trading in The Forex Market
Often traders, especially neophytes, allow emotions to take over and rule the rules of trading. This usually produces failure, and the trader leaves the forex industry with losses, never to come back. Some will come to their senses and begin following strict rules for selective entries while using tight stops. After all, I have said many times, "The greatest distance to travel in the forex is found between the ears." I have seen over and over in the lives of many neophyte traders that they experience the same agony of loss by going live too soon. However, some accept responsibility for their actions in the market and move on to success by not giving up. Enduring the test of time and paying the dues of time in the market is obviously one of the burdens that all beginners have to experience. What is peripheral trading? Peripheral trading is what I refer to as a type of aware-ness that traders need to have when entering or exiting a trade. To solve the problem of unawareness in the markets, you should become aware of how to identify certain criti-cal levels in the market that usually create a bend or a reversal. As most traders know, there are Fibonacci levels within trading ranges that could be identified into infinity, and the larger the trading range, the larger the number of identifiable levels of historical Fi-bonacci levels that are established during former trading ranges. The levels are referred to as the S90/Crossovers, inner/outer walls, and extreme levels, with their off-market rate levels. When conditions are right in the market, and if the market approaches one of these mathematical and visually identified special levels, then modernistic as well as some traditional signals often begin to appear. This is one of the most important confirmation procedures that some backroom traders use to select an entry.
As an example, if the market is approaching an extreme level and if conditions are right, then you will notice a reversal. A modernistic wave trade will appear if the market is going to make a significant move. Also, other modern trade identification procedures and systems such as bridges, River Channel Up/River Channel Down (RCU/RCD) ex-tension clusters, river bend trades, and other confirming signals may be present. Theseduplicating confirmations and the awareness of the presence of other confirmations will only increase the safety of the trade as well as give you, the trader, an edge in the market.
Summary: The greater the number of various types of confirmations that appear, the greater the odds of a successful and profitable trade. Memorizing more than 10 different types of forex signature trades, procedures, and their associated signals, as well as prac-ticing them on a demo until proficient, will only enhance the probability of your success when trading the largest legal financial industry in the world, the forex.
DAILY TRADING TIPS
Traders may feel a need to trade every day, probably due to a need to succeed or pay the bills. This urgency to succeed or to pay the bills by trading every possible minute often leads to mistakes in the market. Making trades happen (i.e., forcing them) instead of allowing a trade to come to you leads to failure; market opportunities must come to traders naturally as market conditions allow. Waiting for a trade opportunity to develop may force you to take a day or two off from entries until conditions in the market shape up properly. The time taken off by traders during the waiting periods, if you have limited yourself to only one or two combinations, will allow you to spend time with personal studies. Others, who have expanded their forex trading portfolio to include numerous country combinations, have more opportunity and will find themselves busy enough to eventu-ally become full-time traders, if they're not already trading full-time. It seems there is opportunity in the forex marketplace almost 24 hours a day, if you have the proper tools to assist in alerting you of possible entries into the market.
Work Smart and Not Hard
If you use the CFG Smart Charts or other similar charting systems, then you will be able to monitor the multiple River Oscillator Indicators (ROIs) found at the bottom of the charts while using the automated notification software for time-compression agreements. This will cut down on the time needed in front of your computer screen for the best alerts if trading Cherry-type trades, ROI trades, and other types of modernistic signature trades. (A Cherry-type trade is a trade with a high percentage chance that it will be successful. An example would be as follows: If a trader views a ROI strike on a .50 level on a time compression with at least three other, different, time compressions revealing a fib strike on different fib levels with a RC X and all pointing in the same direction -- then an entry of this type would carry a lower degree of risk.) The signal icon found at the top of the charts allows you to set the other alarms to alert you when your favorite trade type appears. Signals on any software system are not guaranteed; however, they are great market watchers to alert you that maybe something is about to happen in the market. These alerts allow you to pull the chart up for proper verification before you commit to an entry, thus reducing your risk of failure.
Monitor Several Time Compressions at One Time
If you have the ability to use a PCI- or ROI-type of oscillator, there are several settings that you may use to coordinate with a Fibonacci level. For example, when a Fib strike is made at a .50 level, then you would check to see if other multiple Fib-level strikes are occurring on other time compressions. When two moving average lines are coor-dinated or synchronized properly with a PCI (percentage chance indicator) or an ROI, then you should easily be able to compare time-compression Fibonaccis. Traders who use SmartCharts trading software have the display already set to visually observe these types of time-compression Fib comparisons.
TRADING TIPS AND THOUGHTS
Confirm your possible trade entries well in advance. A spontaneous decision to enter a trade will increase your risk of failure unless you initiate confirmations. If you make spontaneous trade entries without multiple confirmations, you may achieve some success for a while, but it takes a well-planned confirmation process to achieve 50, 100, or 200+ trades in a row without sustaining a loss. Achieving ongoing trading success takes patience. Spend time in the market observing failures and successes. Make every effort to re-create the positives. Avoid failures like the plague.
Plan your trade and trade your plan. This is the best approach for trading. Brokers don't like scalpers!
Have a bird-dog system. Using trading software alerts or eavesdropping on other professional live traders to see what they are doing in the market (especially if they are really good traders) may help increase your odds of success if you are a beginner or intermediate trader. I am not saying that you should trade someone else's potential trade; instead, I am suggesting you use that person as a bird dog to point out potential trades; then it is up to each individual trader (that means you) to use confirmations to make your final determination to enter the market -- or not. Becoming proficient with your tools will aid in your interpretation and will help you to be more aware of potential trades. Once you've been alerted and made personal confirmations, then you can decide whether to enter the trade. A bird-dog spotting system -- whether it is through another trader, a group of traders, or alert-type software -- is especially good if you cannot look at 15 different currencies at one time. I certainly am not able to watch all currencies at once; therefore, I have become an expert at utilizing a smart-type charting service with alert signals to my advantage.
Treat trading just as you would a regular job. Have a work schedule and stick to it. Work on being positive, and avoid all negative issues. Take responsibility you're your actions in the market, and learn from your losses as well as your successes.
Avoid getting caught in what I call the Skype or chat room traps. I have seen and interviewed formerly successful traders. When we analyzed when they stopped making profits, it always led back to association and meetings with unsuccessful traders. They had spent time talking to other traders (who sounded successful but weren't) at conventions, at trade shows, or in chat rooms. Traders sometimes compare their ratios of progress or success with other traders, and they become depressed because they have not succeeded. I have witnessed too many incidents like this. In the beginning of my own trading career, I also compared my personal skill development to the progress of others, and I began to have the same failure results. To stop this path of associated failure, I had to start associating with successful traders and reading positive, success-oriented books. If you're looking for advice, you might find it in the Bible, in Galatians 6:4, which basically states that one should not compare oneself to others and that each person must be responsible for his or her own burdens. This may suggest that one is responsible for all decisions and actions taken in the market as well as the results that may occur.
KNOW THE "WWW" OF A TRADE
I use the Ws to remind me to keep my priorities straight on every trade entry.
The First W: Why?
Ask yourself the following five questions and make sure you understand the answers:
1. Why am I a trader?
2. Why I should be a trader?
3. Why is it so positive and enjoyable to be a trader?
4. Why should I trade the forex exclusively and bypass the other markets?
5. Why should anyone help someone else learn to trade?
My own reasoning is that it would be important to build the credibility of the industry and establish that there is indeed a future in trading. The fact that the forex is the largest financial industry in the world certainly helps build the case. The freedom, the happiness, the development of self-discipline, the opportunity to help others learn to trade, the opportunity to have excess funds to give to favorite charities, and the job security are all part of my answer to the first W, why. I must develop the attitude that I have a personal cause to be a trader and a mentor in order to constantly strive to achieve success. I want to be the knight in shining armor who comes to save the day to help others. I must feel that I have a mission to achieve. It is very important to have goals that help others. By helping others achieve success, the helper also continues to improve.
The Second W: What?
What do I get out of being a trader?
As a trader, you can achieve personal satisfaction, because you are calling all the shots when you make entries and exits in the markets. Becoming self-employed is a great day, as you begin to enjoy independence with no employer giving orders and no time schedule. You have the opportunity to earn money with no limits attached -- enough money to help others financially, including your church, needy organizations, and victims of disasters.
The Third W: When?
When should I become a full-time or professional trader?
It may be one of the biggest mistakes you could make to delay learning a business that offers probably the greatest opportunity of personal financial growth in the world with a very small amount of start-up capital required. The idea is for you to invest the least amount of money with the greatest earning power. The ongoing overhead of trading the forex is very low, and your goal is to keep trade losses small while you maximize profits and implement a style of selective trade entries. With this goal achieved, then profits should grow as well as your financial freedom.